How Is Rackspace Positioned in the Cloud Space?



Cloud revenues surpassed $7 billion landmark in 1Q16

The cloud has been the most talked about phenomenon in the IT space recently. The majority of the leading players in the cloud space have already released their 1Q16 earnings. Based on these earnings, Synergy Research estimates that quarterly cloud infrastructure service revenues in 1Q16 have surpassed the $7 billion landmark. Here, cloud infrastructure service revenues are comprised of IaaS (infrastructure-as-a-service), PaaS (platform-as-a-service), and private and hybrid cloud.

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Amazon continues to stand tall in the cloud space

As the above chart shows, Amazon continues to rule the cloud space with 31% market share. It’s followed by Microsoft (MSFT), IBM (IBM), and Google (GOOG) (GOOGL), which collectively accounted for 22% of the cloud space.

Apart from these four players who collectively rule more than half of the cloud space, the next 20 players, which include Rackspace (RAX), Oracle (ORCL), Salesforce (CRM), and VMware (VMW), grew 41% on average on a yearly basis. These 20 players collectively held 27% of the cloud space.

Investors interested in exposure to IBM could consider investing in the Technology Select Sector SPDR ETF (XLK). XLK has about 38% exposure to application software and invests almost 3.1% of its holdings in IBM.


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